Tuesday, January 19, 2010

Federal Civil Service Unions worry about Conservative attack on pensions.

No doubt public service union workers are well advised to be ready for the Conservative onslaught on workers and especially unionised workers. As Milton Friedman once observed deficits are in some ways useful in that they provide a justification for cutting out social programs and entitlements such as are involved in these public sector union pensions. Recessions also are useful to capital in that they lower wages and make it difficult for unions to improve the lot of workers. This in turn will increase profits once there is any sort of turnaround. Notice that since last March stock markets have been going up even though unemployment especially in the US is at record low levels.

OTTAWA — Canada's 18 federal unions are meeting in Ottawa for two days starting Tuesday to develop a united front against what they believe is the Harper government's gathering assault on the public service.

Facing one of the largest deficits in Canadian history, union leaders are braced for Finance Minister Jim Flaherty to turn to the public service to balance his books.

One big concern is persistent rumblings about cutting to the public service's generous pensions and benefits.

John Gordon, president of the Public Service Alliance of Canada, says the Conservatives have long grumbled about public service pensions. The government has said it won't cut transfers to the provinces or raise taxes, but will rely on economic growth and government spending cuts to eliminate the deficit.

Flaherty has said the "handsome arrangements" of all public servants came up at a recent federal-provincial meeting in Whitehorse on pension reform.

But union leaders say the government should be prepared for an all-out fight if it tampers with their defined benefit pension plan or tries to convert it a defined contribution plan as has happened in the United Kingdom.

Ron Cochrane, co-chair of the National Joint Council, which represents public service management and unions, said "nothing would galvanize even the most apathetic public servant like touching their pension.''

And the unions will be the first to pounce on MPs, judges and deputy ministers whose pensions are even richer than those of the rest of the public service.

The most talked about way for the government to reduce the pension costs of its employees is to make public servants, who now make about 32 per cent of the contributions to the plan, to pick up half the share of the cost.

Federal employees paid $1.2 billion in contributions into the plan in 2007-2008 while the government kicked in $2.6 billion.